Unlawful Internet Gambling Enforcement Act of 2006 (wiki) (notes)

UIGEA – Unlawful Internet Gambling Enforcement Act:

The Unlawful Internet Gaming Enforcement Act applies to online gambling operations and websites which accept and promote financial instruments or payments that fund accounts. This is not relegated just to sports betting sites, and also applies to online casinos and poker rooms. The UIGEA was signed into law on Friday, October 13, 2006. It basically adds legislation to existing financial provisions of Title 31 of the United States Code. Subchapter IV discusses the “prohibition on funding of unlawful Internet gambling”. Sections 5363 and 5366 of UIGEA “criminalize the acceptance of funds” by operators of almost all gambling websites. The law does not restrict itself to simply US-based businesses, and attempts to regulate non-US businesses as well.

US UIGEA Oversteps Its Reach

However, the World Trade Organization (WTO) argued on behalf of the country of Antigua that US gambling legislation could not govern countries which fall outside of US law. Antigua sued the United States for $3.4 billion in trade sanctioning because of money lost in its online sports betting and gambling industries due to UIGEA enforcement. The European Union also made similar claims against the US. The Antigua complaint claimed that the United States was in violation of its treaty obligations by not allowing “full market access” by its citizens to the online gambling companies headquartered and operated in the island nation. The WTO confirmed in 2007 that the United States lost the legal case.

Further challenges to the UIGEA legislation have continued to this day. Congressman Barney Frank introduced the “Internet Gambling Regulation, Consumer Protection, and Enforcement Act” in 2009, seeking to repeal several online sports and casino gambling statutes in UIGEA. That bill was actually passed, but only limited UIGEA until the year 2010. The Unlawful Internet Gaming Enforcement Act is still in effect in the United States. But ever since President George W. Bush sought to keep secret the details of the United States courtroom loss to Antigua, the UIGEA has been frequently challenged and its efficacy questioned.

UIGEA is Passed Without Any Legislators Knowing Its Final Language

Passed on the very last day before Congress adjourned for 2006 elections, it is alleged that not a single person on the Senate-House Conference Committee had seen the final language of the bill before it passed. That is according to Senator Frank Lautenberg (DEM NJ), and actually UIGEA was snuck in at the last minute as an addition to the SAFE Port Act. The Unlawful Internet Gaming Enforcement Act had absolutely nothing to do with port security, which was the driving force of the SAFE Port Act. The Department of Justice even flip-flopped its eventual support of UIGEA in 2011. That is when the Justice Department said that individual states should be able to dictate their own online gambling destinies, with no federal oversight.

As a US sports betting law, the Unlawful Internet Gaming Enforcement Act is directly aimed at banning and outlawing Internet gambling funding. As the other pieces of sports betting legislation we have covered here indicate, there is no hidden or transparent effort to criminalize individual sports bettors. This means that United States citizens and visitors that want to enjoy some responsible, adult legal sports betting online can do so. They just might experience problems that comes under the scope of US law or governments. Laws like UIGEA have paved the way for legitimate, regulated and licensed Internet sports betting sites to provide a reliable option for US residents, and they have been doing so for decades. So while the UIGEA does creates problems for players looking to fund their online sports betting accounts, there are still many reliable USA sportsbook deposit methods that are safe and viable options for players

2009-The Wire Act Should Not Be Used to Prohibit Internet Gambling Carried Out under the UIGEA Intrastate Wagering Exception (notes)

2011 A crackdown on internet poker may be a prelude to legalisation:

FOREIGN firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits.” Preet Bharara, the US attorney in Manhattan, did not mince his words on April 15th as he indicted PokerStars, Full Tilt Poker and Absolute Poker, three of the world’s biggest online-gambling companies, on charges of operating illegal gambling businesses, concocting an “elaborate criminal fraud scheme”, involving tricking and bribing banks, and “massive money laundering”. At the same time, America’s Department of Justice seized and shut down the firms’ main websites, and filed a civil suit for penalties of $3 billion.

On April 7th the local government of Washington, DC, said that, to boost its tax revenues, it would do so this summer. By confining access to residents (or at least going through the motions of doing so), it hoped not to fall foul of federal legislation, which only applies to interstate commerce.

On March 24th Wynn Resorts, a casino operator, had formed a partnership with PokerStars with a view to operating online sites jointly. Six days later Fertitta Interactive, a business associated with the owners of Station Casinos, joined up with Full Tilt Poker. Both deals were predicated on online gambling becoming legal. The two offline firms support legislation now before lawmakers in Nevada, the home of Las Vegas, that called for the state’s gaming commission to draft regulations for online gambling, to take effect on approval from Congress or the Department of Justice. Both firms scrapped their deals within hours of their partners’ indictment.

On April 19th, as fears grew of a liquidity crisis at PokerStars, the privately owned market leader, the price of shares in Bwin.party Digital Entertainment (formed in March by merging Bwin, a sports-betting firm, and PartyGaming, a gaming website) jumped by nearly 30%, restoring some of the value lost last month when Germany proposed steep taxes on online gambling.

PartyGaming had pulled out of America after the passage of the 2006 law. It has been paying off a penalty of $105m under a non-prosecution settlement with the American authorities, for offences it admits to committing before it withdrew.

2014-The Original Intent of the Wire Act and Its Implications for State-based Legalization of Internet Gambling (notes)

Press Con to restore wire act:

November 19, 2014 EDITORIAL: Congress must reverse foolish online poker policy:

…because of the federal government’s nanny-state ban on interstate Internet gambling, Nevada’s promising online poker industry doesn’t have enough customers to sustain competing companies.

Ultimate Gaming, which 19 months ago became the nation’s first legal, regulated, real-money online wagering website, announced Friday that it was shutting down. The company, launched by majority owner Station Casinos, couldn’t come close to revenue projections because federal law allows online gambling only within the borders of each of the 50 states.

Nevada retains the gaming industry’s gold standard in regulation, so the 2013 Legislature moved quickly to allow online poker within the state’s borders, passing enabling legislation in a single day. Companies invested heavily in the technology with the hope that multistate compacts, allowing states to pool their players, or congressional action legalizing and regulating interstate online poker would reward their risks. But Congress isn’t eager to turn back the clock, and thus far only two other states — New Jersey and Delaware — have legalized online gaming.

The closure of Ultimate Gaming leaves Caesars Entertainment’s WSOP.com, affiliated with the World Series of Poker, and the South Point’s Real Gaming as the only two real-money poker websites in the state. As reported last week by the Las Vegas Review-Journal’s Howard Stutz, Ultimate Gaming Chairman Tom Breitling said federal restrictions “created an extremely cost-prohibitive and challenging operating environment.”


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